June - Club Victoria Inc.
Gaming MachinePerformance AnalysisWhat are appropriate measuring unitsBy Ashley McLeanOperating gaming machines? It’s a popularity contest for all of thosedifferent games on your floor and it’s constantly changing as somegames remain popular and others wane. Gaming customers arenot necessarily loyal they’ll visit other venues to chase a particularly highjackpot or to play the latest game(s) that have just been installed, you needto grow your business or at least stay in business so you need to ensureyour product range is up to date and competitive. So how do you measurethis popularity contest, how do you figure out which games need to go andwhich ones should stay? Since the popular games generate the most profitwe need to identify them by having the right measure and of course forthose at the other end of the scale.Gaming machines have various meters that record play activity but not anyone of these (meters) will necessarily indicate which the best are or whichare the worst however, with a combination of these one can gain a betterunderstanding of which games are popular and in turn profitable. Detailedanalysis of gaming activity on your floor gives you a much better perspectivefor what’s going on from which you can make an informed decision whenmaking changes.We need the key performance indicators (KPI’s) for the games on the floorand a clear understanding of what they represent. Below is a list of the mainKPI’s and there meaning, there are others but for the purpose of this articlewe will remain with these:Turnover:ADT:Revenue:ADR:Actual Hold %:Theoretical Hold %:The total amount of monies bet and playedshown in dollars.The average daily turnover.The metered revenue earned by a machine.The average daily revenue.Actual hold percentage: is a measure of themachines metered revenue as a percentage of allbets (turnover) made.Equals 1 minus the machines RTP% settingwhere RTP% is “Return to Player Percentage”.Theoretical Revenue: The turnover multiplied by the theoreticalhold percentage.Theo ADR:The theoretical average daily revenue.Table 1 below outlines a range of machines and their statistics from play overa 90 day period. Since you are going to analyse your gaming machines youneed a good size period of machine play I find at least the previous threemonths to be suitable as anything less may severely skew revenue figures suchas large jackpots. For analysis the favoured KPI’s are the average daily turnover(ADT), the average daily revenue (ADR), the average daily theoreticalrevenue (Theo ADR) and hold percentage both for actual revenue andtheoretical revenue. I have also included rankings for turnover, revenue andtheoretical revenue to show how these can vary dependent upon outcomes.You will also note that certain cells are highlighted to show where results are80% below floor average this is merely a flag to highlight those games thatare below a predefined amount and therefore require further investigationand possibly remedial action. This flag can be set to highlight any amount asfavoured by the operator.Now let’s look at these outcomes based on the differing values for the KPI’sand why not only one of them should be used as the sole measuring stick interms of popularity (rankings) and ultimately their profitability.The results shown in the table below have been somewhat exaggerated butare not uncommon however, they do show that not any one of the KPI’snecessarily measures accurately a games popularity in terms of rankings. Asyou can see for EGM 1 it ranks first for ADT but last for ADR as the gameseems to have been very generous for this period however, you can also seehow the game has performed in terms of Theo ADR which tends to give abetter measure for game popularity. As for EGM 2 it’s virtually the other wayaround where ADT ranks last and ADR comes in at second but again TheoADR gives a better indication in the rankings. As for EGM 3 it ranks first inboth the revenue categories but second in ADT. EGM 4 has exactly the samerevenue figures for both ADR and Theo ADR so its rankings are all equal.Seeing a pattern here? The values for turnover or revenue are not alwaysa true indication of where a game lies in the rankings but the theoreticalrevenues certainly give a better indication. Since you are operating differentgames under different hold percentages the theoretical revenue takes thesevarying operating percentages into account as theoretical revenue is theproduct of turnover and the games operating hold percentage setting.For assistance with analysing your gaming business please contactInteractive Advisory Group, Ashley McLean – Gaming machineperformance analyst on 0402 994 556.CLUBConnect May/June 2013 27